What term describes a formal review of an organization’s financial records?

The term that describes a formal review of an organization’s financial records is an audit. An audit typically involves a systematic examination of a company's financial statements and related operations to verify their accuracy and compliance with accounting standards and legal regulations. The objective is to provide an independent assessment of the financial health of the organization, which can enhance trust among stakeholders, including investors, management, and regulatory agencies. Audits can be conducted internally or externally, with external audits being performed by independent third-party firms for greater objectivity.

Accounting, while closely related, refers more broadly to the process of recording, classifying, and summarizing financial transactions rather than the review of those records. A report is a general term for a document that presents information but does not specifically imply a review process like an audit. A statement typically refers to financial statements, which are the end products of the accounting process, but not the review or examination of those statements.